The $25 billion settlement with
banks over foreclosure abuses may result in a wave of home
seizures, inflicting short-term pain on delinquent U.S.
borrowers while making a long-term housing recovery more likely.

Lenders slowed the pace of foreclosures as they negotiated
with attorneys general in all 50 states for more than a year
over allegations of faulty and fraudulent paperwork used to
repossess homes. With yesterday’s agreement, banks are likely to
resume property seizures.

“The best thing about the settlement, frankly, is that it
will be done,” said Stan Humphries, chief economist for
Seattle-based Zillow Inc. (Z), a provider of home-sales data. “The
shadow of the settlement hung over the market for a year now.”